Hospitals express concern for HR 1 provider tax implementation plan

Hospitals are urging the Trump administration to implement Medicaid provider taxes as outlined in last year’s One Big Beautiful Bill Act “with the least possible disruption,” with calls this week to more closely stick to the statute and existing policy in order to limit administrative burden and uncertainty (Source: “As CMS overhauls provider tax policy, hospitals plead for minimal administrative burden, uncertainty,” Fierce Healthcare, Sept. 22).
 
The Centers for Medicare and Medicaid Services (CMS) in July shared its proposed rule addressing the process states use to draw healthcare funds from the federal government —namely a matched tax on providers and Medicaid managed care companies that’s later returned to providers. It outlined a multi-year wind-down of thresholds on the revenue being collected via state provider taxes.
 
The hospital industry in 2025 unsuccessfully opposed legislation to reduce its Medicaid funding and is now imploring the agency to ease its impact by sticking to the status quo where possible. 
 
The American Hospital Association, in its comment letter, said it is “concerned that some proposals in this rule could create serious financial and operational disruption for states, hospitals and the patients they serve.”